Sanders v. Okla. Tax Comm'n

• Decision Date: 21 May 1946
• Docket Number: Case Number: 32010
• Citation: 169 P.2d 748,1946 OK 166,197 Okla. 285
• Parties: SANDERS v. OKLAHOMA TAX COMMISSION.
• Court: Oklahoma Supreme Court

1946 OK 166

169 P.2d 748

197 Okla. 285

SANDERS v. OKLAHOMA TAX COMMISSION.

Case Number: 32010

Supreme Court of Oklahoma

Decided: May 21, 1946

Syllabus

¶0 1. LICENSES - Liability for payment of excise tax on gasoline not dependent on it being used to propel vehicles on public highways.

The taxes levied by 68 O.S. 1941 __ 659[68-659] (a) and 660 are exise taxes levied upon gasoline "sold, or stored and distributed, or withdrawn from storage within the state for sale or other use", and it is immaterial thereunder whether the gasoline is used to propel vehicles on the public highways or not, so long as it is not used for one of the purposes covered by the exemption provisions.

2. SAME - Right of states under Buck Act to tax gasoline within federal areas.

Under the Buck Act of October 9, 1940, 54 Stat. 1060, Title 4 U.S.C.A. _ 12, the states are given the right to levy and collect gasoline taxes within federal areas, regardless of the form of such taxes, to the same extent as though such areas were not federal areas, except in cases where the gasoline is for the exclusive use of the United States.

3. SAME - Gasoline transported into federal area not "exported" within meaning of statutory exemption.

Gasoline transported into a federal area located within the exterior boundaries of the state is not "exported" within the meaning of 68 O. S. 1941 _ 659 e(b), where federal statutes provide that gasoline shall be taxable therein to the same extent as though such area were not a federal area.

Appeal from District Court, Oklahoma County; Clarence Mills, Judge.

Action by Leo Sanders, sole trader, doing business as Leo Sanders Fuel Company, against the Oklahoma Tax Commission. Judgment for defendant, and plaintiff appeals. Affirmed.

Gilliland, Ogden, Withington, Shirk & Vaught, of Oklahoma City, for plaintiff in error.

E.L. Mitchell and W.F. Speakman, both of Oklahoma City, for defendant in error.

HURST, V.C.J.

¶1 This is an action to recover motor fuel taxes paid under protest. The trial court entered judgment for defendant, and plaintiff appeals.

¶2 The case was tried upon the written and oral stipulation of counsel from which the following facts appear: Leo Sanders, a contractor, entered into two lump sum (as distinguished from costplus) contracts with the United States to perform certain construction work on two federal areas known as the Wolf Creek Flood Dam in Woodward county and the Oklahoma Aircraft Assembly Plant in Oklahoma county. He obtained a motor fuel dealer's license under the name of "Leo Sanders, sole trader, doing business as Leo Sanders Fuel Company", in which capacity he appears as plaintiff in this case. Between January, 1941, and August, 1943, as such dealer, he purchased large quantities of gasoline from a refinery at Cushing, Okla. The gasoline was transported by a common carrier to the federal areas where it was received and stored by plaintiff. Thereafter, a bookkeeping sale was effected by Sanders in his capacity as dealer to himself in his capacity as contractor. The gasoline was then withdrawn from storage and used in the tractors and other machinery employed by Sanders, as a contractor, in performing the construction work under his contracts with the government. None of the gasoline was used to propel motor vehicles on the highways. The question for decision is whether, under such circumstances, the defendant properly required plaintiff to pay taxes upon the sale, storage, withdrawal from storage or use of such gasoline.

¶3 1. Plaintiff first contends that since this fuel was not used in vehicles operating upon the highways it was impliedly exempted from taxation by the Legislature. We think there is no merit in this contention. The taxes involved in this case were levied under 68 O.S. 1941 __ 659(a), 660, and 52 O.S. 1941 _ 331[52-331]. Sections 659(a) and 660 levy an "excise tax upon the sale of each and every gallon of gasoline sold, or stored and distributed, or withdrawn from storage, within the state for sale or other use", except gasoline used for certain designated purposes such as cleaning, farming, aircraft purposes and in school busses and by the State Board of Public Welfare. The use to which the gas in question was devoted is not among the enumerated exemptions. Section 331, above, which levies an exise tax of 8/100 of one cent on each gallon of gasoline, etc., is not so explicit but makes no exemptions. But, it is clear that none of these statutes levy a tax upon the use of the public highways to be measured by the gasoline consumed. It is true that the Legislature has provided that nearly all of the revenue derived from gasoline taxes shall be used for highway purposes. But this is the privilege of the Legislature, and if it desired it could amend the law so that the tax could be devoted to other public uses. Section 12 of article 10 of the Oklahoma Constitution constitutes a grant of power to the Legislature to levy excise and other taxes and does not limit the purpose for which they may be levied or used. The view we take on this point is in accord with the decisions from other states. See George E. Breece Lumber Co. v. Gilberto Mirabal, 34 N.M. 643, 287 P. 699, 84 A.L.R. 827; Sparling v. Refunding Board, 189 Ark. 189, 71 S.W.2d 182.

¶4 2. Plaintiff next urges that since the storage of the gasoline and its subsequent withdrawal for use occurred within the bounds of a federal area no tax was due thereon. A proper understanding of this contention requires some discussion of the nature of federal areas or "enclaves", as they are sometimes called, and the state and federal statutes applicable thereto. By 80 O.S. 1941 _ 1[80-1], the consent of the state is given to the acquisition of lands by the federal government for certain purposes, including those for which the areas involved here were acquired. 80 O.S. 1941 _ 2[80-2] provides: "Exclusive jurisdiction in and over any lands so acquired by the United States shall be, and the same is hereby ceded to the United States for all purposes" (except the service of civil and criminal process) so long as the United States "shall own such lands." The United States, however, has surrendered to the state the right to exercise the limited jurisdiction of taxing gasoline and motor fuels within these areas. Section 10 of the Hayden-Cartwright Act of June 16, 1936, 49 Stat. 1521, authorized the states to levy taxes upon "sales of gasoline and other motor vehicle fuels" when sold in federal areas.

¶5 On October 9, 1940, Congress enacted the Buck Act, 54 Stat. 1059, 4 U.S.C.A. __ 12-18. Section 1 of that act provides:

"(a) No person shall be relieved from liability for payment of, collection of, or accounting for any sales or use tax levied by any State, or by any duly constituted taxing authority therein, having jurisdiction to levy such a tax, on the ground that the sale or use, with respect to which such tax is levied, occurred in whole or in part, within a Federal area; and such State or taxing authority shall have full jurisdiction and power to levy and collect any such tax in any Federal area within such State to the same extent and with the same effect as though such area was not a Federal area."

¶6 And by section 7 of the Buck Act, 4 U.S.C.A. _ 12, the Hayden-Cartwright Act was amended to read as...